TinyOwl cofounder held hostage in Pune office for over two days by laid-off employees

The 25 employees in TinyOwl's Pune office had demanded two months' salary to compensate for the layoffs, especially as Diwali was round the corner, and refused to let Choudhary leave the premises without settling their dues.Vasumita S Adarsh&Aditi Shrivastava | ET Bureau | Updated: November 06, 2015, 09:34 IST

Started in 2014 by Harshvardhan Mandad, a IIT-B Alumni, TinyOwl is a location-based food ordering startup from Mumbai. From confirming the order to informing the customer about the estimated delivery time, TinyOwl's app does it all. The startup has raised Rs.100 crore from Sequoia, Matrix Capital & Nexus Venture partners. It added Gurgaon, Bangalore, Pune and Hyderabad in addition to Mumbai on May 1. The firm has an ambitious target to operate in 50 cities by the end of this year.PUNE | BENGALURU: Laid-off employees at food ordering app TinyOwl trapped a cofounder of the company inside the Pune office for over two days, and police were brought in to mediate a settlement, illustrating the flip side of the startup boom in the country. At a police station in Pune, Gaurav Choudhary committed to paying the salaries of all employees who have been fired from the office in the city, bringing to a close the three-day-long fracas between the startup's employees and its management.

On Tuesday, TinyOwl said it would lgo of more than 100 employees in Pune, Gurgaon, Hyderabad and Chennai.

Employees agitated at this second round of layoffs-the company had laid off 200 employees in September-physically restrained Choudhary, 23, in Pune and another cofounder Saurabh Goyal, 25, in the Gurgaon office, mimicking 'hostage' situations mostly seen in larger industrial disputes involving managements and labour union.

The 25 employees in TinyOwl's Pune office had demanded two months' salary to compensate for the layoffs, especially as Diwali was round the corner, and refused to let Choudhary leave the premises without settling their dues.

"The cofounder, however, didn't agree to that," said an employee. "He said there were no funds to pay two months' salary, and most of our contract papers have a clause of onemonth notice period. We have finally agreed to this as we are worried that if we prolong this, we won't even get a month's salary." In an email to the employees in Pune, cofounder and CEO Harshvardhan Mandad said, "We are not seeing any difference in what we have been committing and what you are currently expecting, except for the demand to release the money instantly." The email, accessed by ET, clarified that the notice period payout will be transferred to the employees instantly, and the full and final settlement would be cleared in four weeks, as per standard norms and regulations. Choudhary on Thursday evening left the Pune office for Mumbai, after a team from the head office of the Mumbai-based company assured the employees that their dues will be settled the same day.

PROCESSING LAYOFFS

The cofounders of TinyOwl had decided to fly to Gurgaon, Pune, Hyderabad and Chennai to inform the employees personally of the layoffs as the company was scaling down operations in these cities, centralising operations in Mumbai.

"We have already processed the severance to employees in Pune, who should be getting it today or tomorrow. Right now, our main concern is about the safety of the cofounders and top management," said a TinyOwl spokesperson.

Questions are being raised on how the layoffs were communicated and processed, as the entire group of employees were informed during the day and given the option to leave the same day or serve their notice periods.

"In India, culturally there is a lot of stigma attached to losing your job... Therefore, employees get more worried," said Harish Kumar, CEO at human resources consulting firm Wenger and Watson. "With such young founders, investors also need to be advisers and help in this process. They have a responsibility to not pressurise founders to take these calls immediately." "In large organisations these are extremely well-planned and delicately handled situations," said Anandorup Ghose, performance, rewards and talent practice leader at Aon Hewitt India. "These issues happen when there is closure of plants, but there is usually a 3-6 month planning period before taking such steps with enormous scrutiny on legal issues and compliances."

Several Indian startups including Housing, Zomato, Helpchat, SpoonJoy and Tinyowl have been laying off employees recently as they seek to cut down their burn rate.

Food aggregator Zomato fired about 10% of its workforce (about 300 people) in October. Shortly after that, an elaborate email sent by founder and CEO Deepinder Goyal to his employees was circulated on social media, in which the founder asked his sales team to perform better and clarified doubts about the reason and process of firing. Personal-assistant app Helpchat laid off more than 100 employees a month ago. Housing has let go of nearly 800 employees since September.